Anticraft Ltd. invited applications for 2,00,000 shares of ₹10 each at ₹2 premium, payable as ₹3/- on application. ₹6 on allotment (including premium) and ₹3/- on Call. Public had applied for 2,70,000 shares out of which application for 20,000 shares were rejected and remaining were allotted on pro-rata basis. Rahul who has been allotted 8000 shares failed to pay allotment and call money. His shares were forfeited and later on re-issued 6,000 shares @ ₹8/- per share as fully paid-up.

Based on the above information, answer Questions.

At the time of forfeiture Securities Premium will be debited by:

₹16,000

The correct answer is Option (3) - ₹16,000.

Shares allotted Rahul = 8000
Premium on allotment = ₹2
He did not pay allotment so at the time of forfeiture securities premium reserve is debited
Amount of premium = 8000 x 2
                              = ₹16000